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2007 RPS Bidders Workshop

This document provides guidance and information for bidders participating in the PPA (Power Purchase Agreement) process. It includes contact information, key contract information, requirements for generation facilities, credit and collateral requirements, termination provisions, confidentiality, and more.

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2007 RPS Bidders Workshop

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  1. 2007 RPS Bidders Workshop Guidance for Inputs to PPA May 11, 2007

  2. Cover Sheet & Articles One and Two Cover Sheet • Contact Information for Parties • Reference for key contract information • New Generation Facility, Section 3.9 • Credit and Collateral Requirements, Sections 8.2 and 8.4 • No Fault Termination provisions, Sections 10.1(a) and (b) • Production Tax Credit (“PTC”)/Investment Tax Credit (“ITC”) termination, Section 10.1(c). • Confidentiality, Section 10.7 Article One: Definitions Article Two: Governing Terms and Term

  3. Non-Modifiable Standard Terms & Conditions These terms are highlighted in the online versions of the PPAs (see www.pge.com/rfo).

  4. Article Three: Obligations and Deliveries • Section 3.1(a) – Product • Select PPA for As-Available or for Baseload, Peaking, or Dispatchable • Section 3.1(c) – Delivery Term • Select 10, 15, or 20 contract years • Other is allowed, but must justify to CPUC • Section 3.1(d) – Delivery Point • PPA set up for NP15 in CAISO • Mark up PPA for delivery outside of NP15

  5. Article Three: Obligations and Deliveries (continued) • Section 3.1(e) – Contract Quantity • Enter the expected annual energy output • For As-Available, also enter % of Contract Quantity guaranteed over 24 month rolling period • Example: for a 70% annual guarantee, enter 140% • Section 3.1(f) – Contract Capacity • Enter the maximum capacity available for delivery • Section 3.1(h) – Interconnection Facilities • Enter the interconnection point (substation or transmission line)

  6. Article Three: Obligations and Deliveries (continued) • Section 3.4(b) – EIRP Requirements (for As-Available only; does not apply to Baseload) • Pick the applicable paragraph depending on EIRP eligibility as of execution date • Section 3.9(c)(iii) – Guaranteed Project Milestones • Enter the Guaranteed Construction Start Date and the Guaranteed Commercial Operation Date • Up to 180 day allowance for early COD • Up to 90 day delay for Force Majeure • Up to 60 day cure period for missing milestones

  7. Article Four: Compensation; Monthly Payments • Section 4.1 – Contract Price • For each Contract Year, enter the price per MWh • Price can be flat or vary by Contract Year • Section 4.3 (As-Avail) or 4.4 (Baseload) – Monthly TOD Payment • Sum of each hour’s Scheduled Energy times the Contract Price times the TOD Factor • Example: 3-4 pm on a Tuesday in June • 50 MW scheduled * $80/MWh contract price * 2.037 TOD factor = $8148

  8. Article Four: Compensation; Monthly Payments (continued) • Section 4.6 (As-Avail) and 4.7 (Baseload) – Imbalance Energy • If in EIRP (As-Avail), all imbalances between Scheduled and Delivered Energy are settled between Seller and CAISO • If not in EIRP (As-Avail and Baseload), true-up between seller and buyer based on price differences for Imbalance Energy and the TOD-adjusted Contract Price • If Delivered > Scheduled (defined as Positive Imbalance Energy) and if the Imbalance Price > (Contract Price * TOD factor), Buyer’s monthly payment to Seller is reduced by the amount of the Imbalance times the price difference (Imbalance Price – Contract Price * TOD) • If Delivered < Scheduled (defined as Negative Imbalance Energy) and if the Imbalance Price < (Contract Price * TOD factor), Buyer’s monthly payment to Seller is reduced by the amount of the Imbalance times the price difference (Imbalance Price – Contract Price * TOD)

  9. Article Four: Compensation; Monthly Payments (continued) • Example: Positive Imbalance Energy • 50 MWh scheduled, 55 MWh delivered • Contract Price is $80/MWh, TOD factor is 2.037 • Applicable Imbalance Price is $200/MWh • Buyer’s monthly payment to Seller is reduced by the amount of the Imbalance times (Imbalance Price – Contract Price * TOD) • (55 MWh – 50 MWh)*($200/MWh - $80/MWh*2.037)= $185.20 • If Imbalance Price < $80/MWh*2.037, then no true up • Example: Negative Imbalance Energy • 50 MWh scheduled, 45 MWh delivered • Contract Price is $80/MWh, TOD factor is 2.037 • Applicable Imbalance Price is $100/MWh • Buyer’s monthly payment to Seller is reduced by the amount of the Imbalance times (Imbalance Price – Contract Price * TOD) • (45 MWh – 50 MWh)*($100/MWh - $80/MWh*2.037)= $314.80 • If Imbalance Price > $80/MWh*2.037, then no true up

  10. Article Four: Compensation; Monthly Payments (continued) • Performance Adjustments for Baseload/Peaking PPA only • Section 4.3 - Capacity Factor • Section 4.6 - Performance Adjustment • For each of the TOD periods (Super-Peak, Shoulder, Night) within each of the months of Period A (June, July, August, and September), performance measured and settled monthly • For each of the TOD periods in Period B (Oct-Feb) and Period C (Mar-May), performance measured and settled monthly, but then trued up on an aggregated basis for each Period B or C

  11. Performance Requirements: Capacity Factor For Each Period Monthly Period 1. Super-Peak 2. Shoulder 3. Night A . June – September 95% 90% 80% B . Oct . – Dec . ; Jan . & Feb . 90% 85% 65% C . Mar . – May 80% 75% 65% Performance Adjustment Factors For Each TOD Period Monthly Period 1. Super-Peak 2. Shoulder 3. Night A . June – September 3.00 2.00 1.25 B . Oct . – Dec . , Jan . & Feb . 2.50 1.75 1.25 C . Mar . – May 1.50 1.25 1.00 Performance Adjustments for Baseload/Peaking PPA • The first table (from Baseload Section 4.5) shows minimum required capacity factors (including maintenance allowance) for each period • The second table (from Baseload Section 4.6) shows the % adjustment for each 1% that the actual capacity factor is below the minimum

  12. Performance Adjustments for Baseload/Peaking PPA (cont’d) • Example: Super-Peak period in June • 10 MW Contract Capacity, 1554 MWh Delivered • 176 hours in TOD period, 8 Seller Excuse Hours • Contract Price $80/MWh, TOD factor 2.037 • Capacity Factor = Delivered Energy / (Contract Capacity x (Hours in TOD Period minus Seller Excuse Hours)) • = 1554 MWh / (10 MW x (176 hours – 8 hours)) = 92.5% • Maximum Performance Adjustment = Contract Price x TOD Factor x 1.0000 x Contract Capacity x (Hours in applicable TOD Period minus Seller Excuse Hours) • = $80/MWh x 2.037 x 1.0000 x 10 MW x (176 hours – 8 hours) = $273,773 • Performance Adjustment = (Performance Requirement - Capacity Factor) x Performance Adjustment Factor x Maximum Performance Adjustment • = (95% - 92.5%) x 3.00 x $273,773 = $20,533

  13. Payments and Performance Adjustments for Dispatchable PPA • Section 4.10 • Capacity Payments based on Time of Availability (TOA) Factor and actual availability • Monthly Capacity Payment = Capacity Price x TOA Factor x Contract Capacity • For months with minimum of 90% and 95% availability, 4% payment reduction for each 1% that actual is below minimum • For months with minimum of 70% availability, 1.5% payment reduction for each 1% that actual is below minimum

  14. Article Five: Event of Default • An outage resulting from Force Majeure that prevents the Project from delivering at least 60% of Contract Quantity to the Delivery Point for a consecutive 12 month period • The failure to meet either of the “Guaranteed Project Milestones” after the 60-day cure period has expired • For As-Available Products, the failure to achieve the Guaranteed Energy Production requirement • For Baseload and Peaking Products, Capacity deficiency or Capacity Factor deficiency • Net Rated Output Capacity is less than specified amount at COD or specified percent after COD • Capacity Factor is less than specified percent for 12 consecutive months (reasons other than Seller Excuse Hours) • For Dispatchable Products only, Availability Factor deficiency

  15. Articles Six through Nine • Article Six: Payment • Article Seven: Limitations • Article Eight: Credit and Collateral Requirements • Article Nine: Governmental Charges

  16. Article Ten • Article Ten: Miscellaneous • SEP Awards and Contingencies • Production Tax Credit (“PTC”)/Investment Tax Credit (“ITC”) termination • Representations, Warranties and Covenants • Indemnities • Assignment • Confidentiality • Audit • Insurance • Access to Financial Information

  17. Articles Eleven through Thirteen • Article Eleven: Conditions Precedent • Article Twelve: Dispute Resolution • Article Thirteen: Notices

  18. Appendices Appendix I Form of Letter of Credit Appendix II Initial Energy Delivery Date Confirmation Letter Appendix III Milestones Schedule Appendix IV Project Description Including Description of Site Appendix V Form of Certification Appendix VI Commercial Operation Certification Procedure and Procedure for Subsequent Capacity Terms Appendix VII Form of Monthly Progress Report Appendix VIII Outage Notification Form Appendix IX Counterparty Notification Requirements for Outages and Generation Schedules. Appendix X Resource Adequacy

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